Correlation Between Primary Health and Hammerson PLC
Can any of the company-specific risk be diversified away by investing in both Primary Health and Hammerson PLC at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Primary Health and Hammerson PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Primary Health Properties and Hammerson PLC, you can compare the effects of market volatilities on Primary Health and Hammerson PLC and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Primary Health with a short position of Hammerson PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Primary Health and Hammerson PLC.
Diversification Opportunities for Primary Health and Hammerson PLC
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Primary and Hammerson is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Primary Health Properties and Hammerson PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hammerson PLC and Primary Health is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Primary Health Properties are associated (or correlated) with Hammerson PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hammerson PLC has no effect on the direction of Primary Health i.e., Primary Health and Hammerson PLC go up and down completely randomly.
Pair Corralation between Primary Health and Hammerson PLC
Assuming the 90 days trading horizon Primary Health Properties is expected to generate 0.61 times more return on investment than Hammerson PLC. However, Primary Health Properties is 1.64 times less risky than Hammerson PLC. It trades about -0.08 of its potential returns per unit of risk. Hammerson PLC is currently generating about -0.23 per unit of risk. If you would invest 9,675 in Primary Health Properties on August 28, 2024 and sell it today you would lose (175.00) from holding Primary Health Properties or give up 1.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Primary Health Properties vs. Hammerson PLC
Performance |
| Timeline |
| Primary Health Properties |
| Hammerson PLC |
Primary Health and Hammerson PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Primary Health and Hammerson PLC
The main advantage of trading using opposite Primary Health and Hammerson PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Primary Health position performs unexpectedly, Hammerson PLC can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Hammerson PLC will offset losses from the drop in Hammerson PLC's long position.| Primary Health vs. Aeorema Communications Plc | Primary Health vs. Zegona Communications Plc | Primary Health vs. Universal Display Corp | Primary Health vs. SMA Solar Technology |
| Hammerson PLC vs. Derwent London PLC | Hammerson PLC vs. Workspace Group PLC | Hammerson PLC vs. Diversified Energy |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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